Declared export value cannot be rejected without evidence of extra realisation; concessional duty rate applies to iron ore lumps.

Declared export transaction value cannot be rejected under the Customs Act and Valuation Rules unless there is cogent evidence of extra realisation beyond the invoice value; mere assumptions drawn from shipping bill references are insufficient, so re-determination on that basis is unsustainable. Where the exported iron ore fines contained a limited percentage of lumps and a concessional notification applied for the relevant period, duty had to be assessed at 10% ad valorem and not the higher 15% rate. The order was therefore set aside on valuation, with duty to be recomputed at the correct concessional rate.

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Issues: (i) whether the declared transaction value for the export consignment could be rejected and the value re-determined under the Customs Valuation Rules, 2007; (ii) whether the excess lumps in the iron ore fines were liable to duty at 15% ad valorem or 10% ad valorem.

Issue (i): whether the declared transaction value for the export consignment could be rejected and the value re-determined under the Customs Valuation Rules, 2007.

Analysis: The declared value was rejected because the BRC was read as referring to four shipping bills and a larger aggregate quantity. The record, however, showed that the disputed Vizag shipment covered only the quantity actually loaded under the relevant invoice and bills of lading, and there was no material showing any amount realised over and above the invoice value. In the absence of evidence of extra consideration, rejection of transaction value could not rest on assumption or presumption. The reasoning for re-determination was therefore inconsistent with Section 14 of the Customs Act and the valuation rules.

Conclusion: The rejection of transaction value was not sustainable and the reassessment on that basis could not stand.

Issue (ii): whether the excess lumps in the iron ore fines were liable to duty at 15% ad valorem or 10% ad valorem.

Analysis: The goods were found to contain a limited percentage of lumps. The applicable notification reduced the duty on such lumps to 10% ad valorem for the relevant period. The higher rate of 15% applied only in the absence of that concession, and the duty had therefore been worked out on an incorrect rate.

Conclusion: The excess lumps were liable to duty at 10% ad valorem and not 15% ad valorem.

Final Conclusion: The appeal succeeded on the valuation issue and the impugned order was set aside, but the duty liability was required to be recomputed by applying the correct concessional rate for the lumps.

Ratio Decidendi: Declared export value cannot be rejected without cogent evidence of extra realisation, and where a specific concessional duty notification applies to part of the exported goods, assessment must be made at that notified rate.

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